Features
Mangala’s Economics
I found Karma inexplicable that such an effective Politician was not only taken away prematurely, but we were also denied the right to pay our respects as well.
In recent times, as Foreign Minister he ensured that our International relations were at their best ever.
His period as Finance Minister saw us register with long overdue financial discipline, two consecutive years of primary revenue surpluses in 2017 and 18, for the first time after over fifty years .
In a brief stint as Sports Minister he inspired Vijay Malalasekera’s Interim Committee to such an extent that we recorded our most successful years in International Cricket, with Integrity unquestioned !
Above all he was a very decent, humble, honest and civilised human being and was blessed in consequence with a Midas touch as his tenures will confirm.
We can all stand proudly and say “Here indeed was a true Statesman”
So Let us console ourselves that fate took him prematurely, to enable an early rebirth through his good Karma, and a path thereafter in Politics that will see him as the Head of State of a New Sri Lanka within forty years !
A prosperous era when educated Parliamentarians will adorn that revered Institution, with Country,, ALL its people and self in that order as their priorities and a Parliament that will conduct its affairs with dignity making its people truly proud
“Mangala” deserves that posthumous reward.
In the Interim Dear Sir, Rest in Peace.
A Grateful Citizen
by Deshal de Mel
When Mangala Samaraweera took over the Finance Ministry portfolio in May 2017 Sri Lanka was preparing to face some of its most challenging years in macroeconomic management. 2018 was the year that the government had to make its highest ever domestic debt repayments (LKR 922 billion in capital repayments of domestic debt. For context, in 2020 the domestic debt capital repayment was LKR 456 billion). In 2019 Sri Lanka had to make its highest ever foreign debt repayments (LKR 575 billion foreign capital repayments in 2019. In 2018 the foreign capital repayment was LKR 315 billion and in 2020 it was LKR 505 billion).
In addition to managing an economy where annual debt service payments (LKR 2,022 billion in 2019) were higher than government revenue (LKR 1,891 billion in 2019), in mid-2017 the country was in the midst of its worst drought in 40 years. Agricultural incomes had been decimated and the economy was also hurting from devastating floods in other parts of the country. The fragile coalition between President Maithripala Sirisena’s SLFP and Prime Minister Ranil Wickremesinghe’s UNF was also beginning to show the first signs of cracks as a two year honeymoon period was over. Amidst these challenges Mangala’s time was largely focused on firefighting these critical issues. That did not stop him from taking on some of the most important macroeconomic reforms during his two year stint as Minister of Finance.
Addressing Sri Lanka’s Fiscal Weakness
1996 was the year that Sri Lanka won the cricket world cup but it was also the last year that Sri Lanka had a government revenue to GDP ratio of over 20% (it was 20.1%that year and was consistently above 20% over many years prior to that). Since then revenue had declined dramatically, reaching a nadir of 11.6% in 2014. This was amongst the lowest government revenue performances in the world. Sri Lanka’s recent public expenditure ranging between 17% and 20% of GDP was not high by global standards. As of 2020 Sri Lanka’s government expenditure comprised largely non-discretionary spending including salaries and wages (6% of GDP), interest (6% of GDP), welfare and transfers (4% of GDP). Therefore there is very little room to meaningfully reduce expenditure in a practical manner.
The main causative factor behind Sri Lanka’s consistently high budget deficits was its weak revenue base. Sri Lanka also has an extremely regressive tax structure. As at 2017 approximately 82% of tax revenue was collected as taxes on goods and services and 18% as taxes on income and other direct taxes. Typically taxes on goods and services (indirect taxes) fall disproportionately on the poor. A family would pay the same tax on milk powder regardless of whether their household income is Rs. 50,000 or Rs. 500,000. This was how over 80% of Sri Lanka’s taxes have been collected. This reliance on taxes on goods and services has also contributed to driving up the cost of living as the tax component of prices continues to increase.
Mangala’s simple principle for taxation policy was that the government should wherever possible reduce upfront taxes and costs that disincentivize the commencement or establishment of business. However, once a business is established and profitable, it should pay its fair share in income taxes. This was the opposite to the reality at the time — Sri Lanka’s taxes had hitherto been front loaded into indirect taxes such as cess, PAL, NBT, and VAT — whereas income taxes are low and corporates enjoy a range of income tax holidays. As a result there is typically a high cost of entry into industry and limited competition among established players.
Taxes on incomes have been low for several reasons including open-ended tax holidays, weak collections reliant on self-declaration, and other leakages. The Inland Revenue Act of 2017 was drafted in order to address as many of these issues as possible.
In general the new legislation intended to shift to a rule based tax structure, moving away from discretionary policy which leaves room for leakages and graft. The IRA had important positive impacts on tax collection. Even though the legislation came into effect in April 2018, the full impact of the legislation would only be seen in November 2019 when the 2019/20 filing is completed. The results were impressive. There was a 44% growth in income tax collection in 2019 in spite of major shocks to the economy, tax payers registered with the Inland Revenue Department in 2018 was 986,684 and by 2019 it had increased to 1,505,552. Most importantly, in 2019 the ratio of direct taxes to indirect taxes shifted to 75% to 25% from 83% to 17% in the previous year. Even though marginal, this was an improvement in Sri Lanka’s highly regressive tax structure.
Primary Surpluses
One of Mangala’s key fiscal objectives at MoF was to achieve a primary surplus in the budget. Since independence, Sri Lanka had achieved a primary surplus only in 1954, 1955, and (marginally) in 1992. A primary surplus in the budget occurs when revenue exceeds expenditure minus interest cost. It is the measure of fiscal management that is truly within the control of the Minister of Finance since the past interest cost is payment for past sins. When a primary surplus is achieved it means the government’s revenue exceeds its non-interest expenditure. A primary deficit means the government has to borrow even to finance interest which is undesirable from a debt sustainability perspective. In 2017 Sri Lanka had a primary surplus of Rs.2 billion and in 2018 Rs. 91 billion (0.6% of GDP).
2017 (5.5% of GDP) and 2018 (5.3% of GDP) also saw two of the lowest budget deficits in Sri Lanka’s recent past. In 2016 as well Sri Lanka limited its budget deficit to 5.3% and in 2013 the deficit was 5.4%. However prior to that the only time the budget deficit dipped below 5.3% was in 1977 (4.5% of GDP).
A critique of this achievement is that even though the government had primary surpluses in 2017 and 2018, and the overall debt to GDP decreased in 2017 (from 79% to 78% of GDP), debt to GDP increased to 84.2% in 2018. The reason behind the increase in debt to GDP in 2018 was because of the depreciation of the currency that year due to the global taper tantrum early in the year as the Federal Reserve raised interest rates and the constitutional crisis later that year. When currency weakens, the rupee value of external debt increases, causing the debt to GDP ratio to increase, in spite of the gains made in real fiscal management, which is what can be controlled by the Minister of Finance.
There is also a perception that the decline in GDP growth rates was due to enhanced government revenue measures. However, quarterly GDP growth from Q1 2015 to Q3 2018 averaged 4.3%. This was keeping in line with the average growth levels of 2013 (3.5%) and 2014 (5%). Just as the economy was recovering from the droughts of 2017, this momentum was lost due to the constitutional coup in October 2018 which dragged down Q4 2018 growth to 2.1%. The resulting capital flight and forex reserve sales to defend the rupee resulted in negative market liquidity and higher interest rates that carried on well into 2019, compounded by the Easter Sunday attacks, dragging down 2019 growth as well.

Fuel Price Reform
In early 2018 the hopes of shifting to a market based fuel price formula were fading. This was potentially a major reform given the significant fiscal burden created over the years due to mis-pricing of petrol and diesel and weak balance sheet management by CPC. These factors combined to result in CPC running up debts over LKR 300 billion, mostly placed with the state banks, creating a high-risk fiscal combination. Anchoring retail fuel prices to the global market price (with adjustments for taxes, distribution costs, storage costs, finance costs, and profit margin) would help eliminate additions to the existing fiscal burden of CPC. When global prices rise, the domestic fuel price would rise, when global prices fall, the domestic price would fall. Even if the government chose not to increase retail prices in line with global price shifts, a transparent and publicly available formula would create more visibility on the fiscal costs of such a policy.
Like all challenging reforms, ideally the fuel price formula should have been introduced early in the political cycle, market prices were also trending upwards by 2018. In May 2018 the formula commenced implementation. On the 10th of every month the retail price of fuel will be adjusted to reflect the latest global fuel price (Singapore Platts was the anchor used). The timing could not have been worse, and communication could have been a lot better. Global fuel prices had started sky-rocketing from mid-June and peaked at over US$ 80 per barrel in October from the US$ 50 range leading up to May. Naturally the public associated the fuel price formula with rising prices at the pump. Had the formula been implemented a year prior, the public would have seen prices decline and stabilize prior to increasing. But alas, this was not to be, and the formula was scrapped by the new administration.
Trade Liberalisation
As at end 2019 Sri Lanka’s rank in Trade Openness was 140th out of 141 in the Global Competitiveness Index. In spite of being the first country in South Asia to liberalise in 1977, Sri Lanka’s trade protection levels have increased over the last couple of decades. In the 5 years from 2014 to 2018, the average percentage of government revenue collected at the border was around 49%.
The increased layers of taxes on imports results in three key impediments;
i) These import taxes are a significant burden on consumers. The effective import tax rate of several basic consumption products from milk powder to biscuits goes up to 100%.
ii) Import taxes erode competitiveness as domestic firms receive significant protection from global competition leading to less incentive for innovation and dynamism and thus hinders long term productivity improvements — the true driver of economic growth.
iii) Several intermediate imports have high import taxes — including numerous construction materials. This drives up costs for all industries, eroding competitiveness of almost all Sri Lankan enterprise. It also makes Sri Lanka less attractive a destination for FDI.
In Sri Lanka a lot of border taxes take the form of paratariffs. The standard import duty is customs import duty (CID), however since CID is eliminated in Free Trade Agreements (FTAs) with India and Pakistan, successive Sri Lankan governments have added in layers of paratariffs such as cess and the Ports and Aviation Levy (PAL).
In the 2017 November budget it was decided to commence the elimination of most of these paratariffs. Mangala championed this initiative since he recognized the potential positive implications it would have for the economy in the long term. Some of the treasury officials were less enthusiastic, because there would naturally be a short term revenue loss as a result of removing these tariffs and also because it would result in severe lobbying by protected industries, seeking to retain their walls of protection.
Whilst some in the ministry wanted to see tariffs eliminated almost entirely in a big bang reform move, it was necessary to allow time for domestic industry to adjust to this significant change. It was eventually decided that the best approach would be a five year phase out of most paratariffs. This would make the revenue impact easier to absorb — revenue from PAL and cess amounted to around 1% of GDP. To start with though the 2017 November budget would eliminate paratariffs on 1,200 or so of the least sensitive tariff lines. The impact would not be material, but Mangala felt it would be a robust signal — and also give additional time for industry to make adjustments to the envisaged operating environment. In the March 2019 budget the next phase of para-tariffs was eliminated, and a Trade Adjustment Programme was introduced to provide budgetary support for domestic sector entities that face adverse adjustment costs due to exposure to greater global competition.
Welfare Reform
Another important initiative of the Ministry of Finance under Mangala Samaraweera was the effort to streamline welfare payments. One of the first things Mangala asked me was how we can move away from a system of price controls on essential items to provide relief to the public. He understood that price controls are not sustainable since they are poorly targeted, they tend to result in shortages and erosion of quality when market prices exceed the administered price. And of course they are subject to constant abuse. He was very keen that we look at introducing a system where relief is provided to the needy through cash transfers — his favourite example was Bolsa Familia, Brazil’s cash transfer programme.
Of course this required a robust system of identification and targeting of those who are deserving of such support. This would apply not just to those who were of lower income levels, but also those with disabilities, the elderly and infirm, and those vulnerable to and victims of natural disasters. Sri Lanka’s existing system of welfare distribution, Samurdhi, was woefully inadequate in terms of targeting. Samurdhi had vast numbers of undeserving recipients who benefitted from the scheme and more worryingly, large numbers of deserving citizens who were excluded from the scheme. The World Bank provided technical support in designing such a targeting mechanism and after a lot of work the new targeting criteria was finally gazetted in June 2019. The mechanism consisted of objective, verifiable criteria including education levels, housing conditions, income, electricity consumption, assets, and illnesses. If fully implemented this mechanism of targeting, combined with the use of digital payment systems, would have enabled a transparent and efficient scheme of providing welfare to those who most deserved it, without resorting to the economic inefficiencies of indiscriminate price controls. Unfortunately this initiative too did not make it beyond the election cycle.
Monetary Policy Legislation
Another potentially game changing reform was the new Monetary Law Act. This legislation was championed by the Central Bank under Indrajit Coomaraswamy, and Mangala supported it to the hilt, even at the tail end of the political cycle. The MLA was designed to provide greater independence to the Central Bank, coupled with accountability measures for the Monetary Board. It would create disciplines around deficit financing (money printing) and establish the legal framework for inflation targeting. These measures would have imposed limitations on some of the most problematic interactions between the monetary and fiscal authorities, that have over the years led to Sri Lanka’s fiscal profligacy, deficit financing, all resulting in ballooning debt and monetary instability. Mangala was not a subject expert, but perhaps his best quality was to listen to the experts and formulate his judgment based on the technical advice that he received. The new Monetary Law Act also did not see the light of day.
2018 Constitutional Coup
It had been a very heavy few weeks in the lead up to the 2019 budget to be presented in early November 2018. The 26th of October was a Friday. The Active Liability Management Bill, a landmark piece of legislation that would allow Sri Lanka to buy back or otherwise manage its lumpy liabilities to smoothen out its repayment obligations, was passed in parliament in the afternoon. This piece of legislation had faced stiff opposition by President Sirisena. We had finished the final draft of the budget speech and had sent it for the final technical annotations. The end of a long week and several long months. As I drove out of the treasury building at around six pm I noticed barricades being hurriedly stacked up near the Presidential Secretariat. I didn’t pay much attention and carried on to catch up with some friends.
About forty five minutes in everyone was getting messages, stating that Mr. Mahinda Rajapaksa is being sworn in as Prime Minister at the Presidential Secretariat. The initial reaction was disbelief since that act would in itself be unconstitutional. I made a couple of phone calls and it was clear something extraordinary was going on so I rushed back to the treasury. Most of the staff was gone by this time but the Minister and a couple of the private staff were still around. Nobody could quite believe what was going on. Having thought things through Mangala wanted to send out a tweet at 8.30pm saying “The appointment of @PresRajapaksa as the Prime Minister is unconstitutional and illegal. This is an anti-democratic coup #LKA.” I asked him if he’s sure he wants to use the word coup. It was a strong word and would have important ramifications. He thought for a few seconds and replied in the affirmative, saying that a coup is exactly what is going on.
The economy took a beating over the subsequent two months. Foreign investors took flight and exited their positions in GoSL rupee denominated treasury securities. Rs. 75 billion worth of foreign investments in government securities was sold in just 2 months, creating massive pressure on the currency, causing the rupee to crash from 172/US$ to Rs. 182/US$ between October and December 2018. The currency was already weak due to the taper tantrum in the early part of the year which hammered all emerging economies. When capital flows started reversing in Q4 and other emerging economies saw a recovery, Sri Lanka was in the midst of the coup and associated capital flight.
During this time the government sold US$ 1 billion worth of reserves in just 1 month as reserves declined from US$ 7.9 billion to US$ 6.9 billion. These were valuable reserves the government had been building up in preparation for the substantial external debt repayments in 2019. More importantly Sri Lanka’s credit rating was downgraded by all three rating agencies in November 2018. On the 30th of November 2018 the yield on the January 2019 ISB had reached 10.7% from 5.6% on 26th October. This meant that Sri Lanka was effectively locked out of global capital markets on the cusp of having to settle over US$ 5.3 billion in debt repayments in 2019, including a US$ 500 million ISB in early January 2019. It was heart breaking for Mangala watching this unfold from the sidelines given all the efforts that he had and the team had taken to keep the economy stable to meet the 2019 debt repayments amidst the global bond market volatility in 2018.
As the economy deteriorated into December it became clear that the adverse impacts of the coup would be long lasting. Due to the sales of US$ 1 billion worth of reserves by the Central Bank, liquidity in the domestic rupee market also reduced dramatically. The market was short LKR 100 billion in the overnight money markets and this pushed up domestic interest rates dramatically as well. Prior to the coup, the 1 year treasury bill was in single digits at 9.5% as at end September 2018, having been at 10.5% when Mangala became Finance Minister. During the coup interest rates shot up to 11.25% by mid-December. The market was LKR 100 billion liquid short till at least April 2019, keeping interest rates elevated and hurting economic growth significantly in 2019. The high interest cost added to Sri Lanka’s debt concerns as well by driving up the cost of domestic debt.
Managing External Debt in 2019
When the Supreme Court verdict came through in 13th December and Mangala returned as Finance Minister, there was a lot of work to be done. Firstly there was no year end budget to authorize payments for 2019, and Sri Lanka had lost access to global capital markets to finance the country’s highest foreign debt repayments in 2019. A quick vote on account was passed by end December, and the next step was to somehow regain access to global capital markets to make sure we can refinance debt repayments. It was unfortunately too late for the January 2019 bond which we had to settle out of the already diminished reserves. Soon afterwards Mangala led a team to Washington to meet with the IMF and re-instate and re-negotiate Sri Lanka’s programme. In spite of Mangala losing his suitcase and D.C. being having a snow day as soon as we arrived, the team met with Christine Lagarde and the technical team led by Manuela Goretti, and after some tough negotiations we were able to set the programme back on track with some important concessions. The external goodwill towards Sri Lanka was palpable, and there was nobody better than Mangala to leverage this to the country’s best advantage.
Over the next two months Mangala had to put together a delayed budget for 2019. This was a particularly tough budget since it was an election year and there were expectations of additional concessions, but at the same time it was critical that the fiscal position would inspire the confidence of global capital markets in order to regain access to external financing. Mangala’s last budget was able to meet both criteria. The March 2019 budget included Programmes such as Gampereliya, a rural infrastructure programme which was seen as a means of providing targeted fiscal impetus to improve cash circulation at the rural level, whilst investing in productive infrastructure leveraging on rural value chains. The enhanced Enterprise Sri Lanka programme was a means of reducing cost of capital, one of the key impediments to SMEs in the country. This was a strategy to provide a targeted reduction in interest rates to productive investments without a general reduction in interest rates. A general reduction in interest rates at the time would have led to an acceleration of capital flight post-coup, and would have further de-stabilized an already volatile external sector. Mangala had some other wonderful ideas in that budget, including providing scholarships for the best performing Advanced Level students to study at any top global university that they qualify for admission.
The budget was also able to satisfy global markets and Sri Lanka regained access to global capital markets. Immediately as the budget was passed, the Central Bank led the process of raising the required International Sovereign Bonds (ISBs) to settle the upcoming debt payments in 2019. However, whilst settling the immediate debt, Mangala and Indrajit Coomaraswamy were also cognizant of the fact that leading into two election years (2019 presidential and 2020 parliamentary), Sri Lanka may face risks in retaining global capital market access to finance debt repayments in 2020 and 2021. Accordingly, Mangala and Indrajit made a conscious decision to raise an additional US$ 2.4 billion dollars worth of ISBs in mid-2019 to build up reserves to US$ 7.6 billion by end 2019 to tide over a volatile couple of years ahead. Whilst today many politicians criticize the previous government’s international sovereign bond strategy, it is the reserves built through the US$ 4.4 billion ISBs raised in 2019 that have been used to settle Sri Lanka’s external debts in 2020 and 2021. Sri Lanka would have already defaulted if not for Mangala and Indrajit’s decision in mid-2019.
True Patriot
There are of course many things that I’m sure Mangala wishes went differently. He wanted to update and upgrade legislation for Customs and Excise — to reduce subjectivity, discretion, and shift to a more rules based framework for both pieces of legislation. He wanted to do move faster on trade reform but the political economy of late stage reform made such intentions difficult to fulfil. He was also keen to invest more in education, health, and reconciliation. He wanted to bring in legislation to address microfinance and informal finance related household indebtedness. There was a lot more than could be done within an interrupted 2 year tenure.
I and many others will miss Mangala not so much for his achievements and efforts as Finance Minister. Nor for his work towards reconciliation from the Sudu Nelum movement to date, for his work in liberalization of the telecom sector in the late 1990s, for his work with the UDA in Colombo’s initial beautification. I will miss a human being of immense courage, who stood for what is right regardless of societal or political compulsions. A man of integrity, conviction, and humility. A patriot in the true sense of the word.
Deshal de Mel Economist based in Sri Lanka
Features
From Bally’s to the Backstreet: Inside the business of Casinos and Cards – II
A quick guide to Buruwa
for the uninitiated
Buruwa is traditionally played with a 52-card pack, a standard deck. Players sit in a circle, and after the cards are shuffled by the dealer, one player who sits right side of the dealer can cut the deck and “request” a specific card from the dealer who must deliver it into two sets (hitting-the dealer’s side and asking-the opposite side), after set aside two cards, and the first player to collect their requested card wins. it’s quick, sociable, and genuinely simple to learn, which is a large part of why it has survived, largely unbothered by the law.
(The second instalment in a five-part series on the business of gambling, legal and illegal)
by Prof. C. A. Saliya
Walk along the Colombo waterfront, after dark, and you’ll see it: a strip of glass and neon that would not look out of place in Macau or Manila, tucked in among the hotels and office towers. Bally’s. Bellagio Entertainment. The Ritz Club. Stardust. The Continental Club. MGM Grand Colombo. Kollupitiya Casino. Crown Club. Tokyo Club. Nine full-scale casinos, in one city, on one small island, more than most people realise, not that the country’s own citizens are technically allowed to use.
That last part isn’t a typo. Under Sri Lankan law, these casinos exist primarily for foreign passport holders. Locals occupy a strange legal shadow around their own country’s casino industry, not quite welcome, not quite banned, depending on which club, which night, and which security guard is on the door. It’s the first sign of something that runs through this entire industry, all the way down to the humblest card game in the smallest village: in Sri Lanka, who is allowed to gamble has always mattered more than whether gambling itself is right or wrong.
The price of a licence
Running one of those nine casinos legally is not cheap. Under the rules brought in a few years ago, a casino licence costs 500 million rupees, and it only lasts five years before you have to pay again. On top of that, the government has been pushing to raise the tax on casino profits from 40 percent to 45 percent (the Casino Business Licensing Regulation No. 1 of 2022, published on August 31, 2022).
Sit with those numbers for a moment, because they tell you something important about who actually gets to run a legal casino in this country. Half a billion rupees before you’ve dealt a single card, renewed every five years, on top of one of the highest profit tax rates applied to any industry here, that is not a price a small local businessman can pay. It is a price only a handful of large, well-financed groups can afford. The result is an industry that looks, on paper, like it’s tightly regulated and heavily taxed, which it is, but that regulation also happens to conveniently protect the handful of big players already inside the gate from any new competition. That is not necessarily corruption. It is just how licensing fees this steep tend to work everywhere in the world: they keep an industry “controlled,” and they also keep it small, exclusive, and dominated by whoever could afford to get in early.
For scale, look at Sri Lanka’s neighbours in the casino business. Macau, the former Portuguese colony now part of China, pulls in more casino revenue in a single year, over $22 billion at last count, than most entire countries collect in tax. Singapore’s two giant resort casinos, Marina Bay Sands and Resorts World Sentosa, bring in a combined $4 billion or more. Sri Lanka’s nine-casino Colombo strip is a genuine tourism asset and a real contributor to state revenue, but next to those regional giants, it is still a minnow swimming with sharks, which is exactly why the government keeps trying to expand and formalise it rather than shrink it.
The card game everyone plays and nobody arrests
Now step away from the waterfront and into a completely different world, one that exists in every town and village on the island, at every funeral house, every festival season, informal gambling pots.
It’s called Buruwa. Some people call it “Baby Cutting.” It’s a simple, fast-moving card game, a well-worn 52-card deck, players taking turns to request a card, a person to get the card they asked for taking the round. There’s no croupier, no neon, no five-hundred-million-rupee licence but only a commission called Tome which is charged from the dealer if the dealer wings a three rounds, usually 20% of the winning amount. Just a mat, a deck of cards, and a small pile of notes that keeps changing hands.
Here’s the thing: Buruwa has been against the law since 1889. The old Gaming Ordinance from that year criminalised what it called “unlawful gaming”, playing a game of chance for money in any public place, in most circumstances, and that law is still technically on the books today. And yet Buruwa is arguably the most socially normal form of gambling in the entire country. It isn’t hidden. It’s played in the open, in front of children, blessed almost by tradition itself. Funeral houses themselves often as a fundraising events, with a genuine gambling element to them, to raise money for entirely legitimate and community causes.
This is the part of Sri Lanka’s gambling story that rarely makes it into any government report: an activity that is, on paper, a criminal offence, is in practice one of the most widely tolerated pastimes in the country, precisely because almost everybody has played it at some point, in some form. You cannot arrest an entire village. And no government, in more than a century of trying, has seriously attempted to.
It isn’t only card games in village settings, either. Head into some of Colombo’s more exclusive private clubs and you’ll find money changing hands over poker, bridge, tombola, darts, snooker and billiards, all technically covered by the same 1889 definition of “unlawful gaming” if played for a stake, and all almost entirely ignored by anyone in a position to enforce that law.
When the law does bite
Enforcement isn’t completely theoretical, though, it’s just extremely selective. In 2019, Sri Lankan authorities shut down several illegal casinos operating in Colombo, not village card circles, but full commercial operations offering slot machines and table games without a licence, competing directly with the nine legal venues on the waterfront. That distinction matters. When the state does step in, it is almost always to protect the revenue and market position of licensed operators against unlicensed commercial competitors, not to stamp out gambling as a social activity. A family playing Buruwa has essentially nothing to fear. A businessman running an unlicensed slot-machine parlour has everything to fear. The law on paper treats both as the same crime. The law in practice treats them as entirely different worlds.
Where the new law fits in
Sri Lanka is now in the middle of rewriting the rulebook for all of this. A new Bill would scrap three old, separate laws, the ones covering horse racing, general gambling, and casinos, and replace them with a single Gambling Regulatory Authority responsible for the whole industry, online and offline. It’s a genuinely significant modernisation, and we’ll examine it properly in our final instalment.
But here’s a question worth asking now, before that new authority even opens its doors: will it change anything at all for Buruwa? Almost certainly not, and, honestly, it probably shouldn’t try to. A regulator built to license casinos, tax betting operators, and police online platforms has neither the tools nor, frankly, the moral standing to start prosecuting card games at funeral houses. The more interesting question the rest of this series will keep returning to is whether that’s a sensible, deliberate choice, leave the harmless social gambling alone, focus enforcement on the commercial and online operators where the real money and the real harm actually sit, or whether it’s simply a gap nobody in government has ever bothered to think through. (See Inset)
Next week, Part 3 turns to a very different kind of “casino”, one that never uses the word gambling at all, dresses itself up as investing, and lives entirely on your phone: the world of forex and CFD trading apps.
(Prof. C. A. Saliya, is a charted accountant, academic, researcher and former banker. He is the author of SAMAJA GAVESHAKAYA and Springer Publication DOING SOCIAL RESEARCH. He can be contacted at saliya.ca@gmail.com. The views expressed in this article are his own and do not necessarily represent those of the organisations with which he is affiliated.)
Features
Why should faith promote justice?
A catholic response to national pursuit of accountability
By Rev. Dr. Rashmi M.Fernando, S.J.
Sri Lanka appears to be entering a decisive chapter in its ongoing investigations regarding the Easter Sunday bombings, in 2019, and other accountability issues. For decades, our nation has carried the heavy burden of unresolved wounds: corruption, enforced disappearances, political assassinations, abductions, financial crimes, abuse of power, and the many forms of violence that have left individuals, families, and communities searching for truth and closure. Many citizens have cast their votes with the hope that a new political administration would have the courage to pursue accountability where previous governments have failed.
Why Justice if Forgiveness is a Christian Virtue?
As investigations continue and legal processes unfold, however, another familiar phenomenon has emerged. Those who fear accountability, or those who perceive themselves or their political allies to be threatened by investigations, increasingly appeal to religion—particularly the Catholic Church—to argue that Christians should simply “forgive and forget.”
Some have even criticized local Church leaders for continuing to seek the truth, suggesting that Christians should move on because forgiveness lies at the heart of the Gospel. If Christians are called to forgive, why continue investigating crimes? Why pursue accountability? Why insist on knowing who was responsible?
The argument sounds pious. But it is profoundly incomplete. It raises a fundamental question for Christians, and particularly for Catholics: Does forgiveness require us to abandon the pursuit of justice? If not, why?
The Cry of the Oppressed is the Cry of the Church Demanding Justice
The answer of the Christian tradition is unequivocal: No. Indeed, authentic Christian faith does not ask us to choose between forgiveness and justice. It calls us to hold them together. The Catholic tradition begins with a simple but profound conviction: every human being possesses an inviolable dignity because every human being is created in the image and likeness of God.
Consequently, any act of violence committed both personally and collectively is not merely a violation of a rule. It is ultimately a violation of God’s image and likeness and, consequently, the very dignity and nature of the whole of humanity. For this reason, Catholic Social Teaching (CST) reminds us that the common good is not simply whatever benefits the majority or those who possess power. The common good includes the social conditions that allow every person and community to flourish.
Moreover, CST has a particular concern for those whose voices are the weakest, those whose voices are made weak, and those whose dignity is most easily ignored. This is the foundation of the Church’s preferential option for the poor and vulnerable. When people are abducted, when families are denied the truth about disappeared loved ones, when public resources are stolen, when political power is abused, when the poor are exploited, when violence is permitted to go unpunished, or when institutions are manipulated to protect the powerful, something more than law is being violated. The dignity of persons and the moral foundations of society itself are being wounded.
That is why the Church cannot be indifferent when victims are silenced. Because they lack political power, the Church cannot remain neutral when families continue to live with unanswered questions. She cannot call for peace while ignoring the cry for justice of those who have suffered. A peace built upon silence is not necessarily peace. Often it is a sign that the poor and the wounded have cried without anyone to hear them. That is why the Christian faith requires a voice, a voice that cries out for truth, dignity, responsibility, the common good, solidarity, and restoration.
Promotion of Justice is an Absolute Requirement of the Service of Faith
The Church does not seek political power by standing with victims. She stands with them because the God she worships is the God who hears the cry of the needy. The God of the Scriptures repeatedly hears the cry of the poor, the widow, the orphan, the stranger, and the oppressed. The Jesus of the Gospels consistently moves toward those whom society pushes to the margins.
The Second Vatican Council gave Catholics a renewed understanding of the Church’s relationship with the world. Gaudium et Spes famously reminds us that the “joys and hopes, the griefs and anxieties” of the people of our time are also the joys and hopes, griefs and anxieties of Christ’s followers. The Church, therefore, cannot isolate herself inside sanctuaries while society suffers outside her doors. When injustice wounds society, silence is not always neutrality. Silence itself becomes a moral decision.
The conviction of the Council has particular significance for the Society of Jesus. The 32nd General Congregation of the Society of Jesus, in 1975, articulated one of the defining principles of contemporary Jesuit mission: “The service of faith, of which the promotion of justice is an absolute requirement.”
The wording matters. The promotion of justice is not presented as an optional consequence of faith—as though some Christians might be interested in justice while others might simply concentrate on prayer and personal holiness. It is an absolute requirement of authentic faith. The Jesuit understanding of mission subsequently developed around the inseparable relationship between faith, justice, reconciliation, and dialogue. Later General Congregations of the Society emphasised reconciliation with God, with one another, and with creation.
Reconciliation here does not mean dismissing, forgetting, or unnoticing. Neither does it mean protecting perpetrators from accountability. Nor does it mean asking victims to sacrifice truth for the convenience of society. Forgiveness without truth becomes sentimentality. Justice without forgiveness can become vindictiveness.
The Reality of Social Sin Beyond Individuals
The distinction between faith and justice becomes even more important when we recognise that sin is not always merely individual. Catholic Social Teaching (CST) speaks of structures that can perpetuate injustice. Pope John Paul II, particularly in Sollicitudo Rei Socialis, developed the language of “structures of sin” to describe social, economic, political, and cultural arrangements in which sinful choices become embedded and reproduced. This means that Christian responsibility does not end with asking, “Who committed the individual wrong?” We must also ask: What structures allowed it to happen? Who benefited from it? Who was silenced? Which institutions failed? What must change so that it does not happen again?
For this reason, the liberation theologians in the Church, such as Gustavo Gutiérrez, Jon Sobrino, and Ignacio Ellacuría, insisted that the Gospel requires Christians to confront structures that perpetuate human suffering. Ellacuría, the Jesuit theologian murdered in El Salvador, in 1989, spoke of the need to “take the crucified people down from the cross.” The phrase is powerful because it reminds us that Christian compassion cannot remain merely emotional. It must become transformative. To stand beside the crucified is also to ask why they were crucified in the first place—and what must change so that others are not crucified tomorrow.
Archbishop Óscar Romero of El Salvador, who was assassinated while celebrating Mass after courageously speaking against violence and social injustice, once observed that there are things that can be seen only through eyes that have cried.
This is a profound theological truth. Those who have never experienced disappearance may speak casually about “moving on.” Those who have never lost a loved one to political violence may find accountability inconvenient. Those who have never lived with poverty may speak easily about patience. Those who have never been abused by power may find it easy to preach forgiveness to those who have.
But the Christian tradition insists that we listen first to the wounded. This is not because victims are always right about every question. It is because justice begins with hearing. Before reconciliation, there must be truth. Before truth can become healing, the wounded must be permitted to speak. And before society asks victims to forgive, society should have the humility to ask what it has done—or failed to do—to protect them.
Forgiveness Never Cancels Justice—and Justice Never Cancels Forgiveness
One misunderstanding about Christian faith is the assumption that forgiveness demands silence, and silence demands complicity. It does not. Forgiveness is, first and foremost, an interior act of the human heart. It is a personal process through which a victim gradually refuses to allow hatred, resentment, and the desire for revenge to imprison the soul. To forgive is to surrender the desire for vengeance and to place oneself, and ultimately the offender, into the merciful hands of God. But forgiveness does not mean that the injustice committed is dismissible, acceptable, or justified. A victim may freely choose to forgive, but that person cannot and should not, by personal forgiveness, absolve wrongdoers from their responsibility to protect others from being harmed in the same way. Society has a responsibility to establish the truth, protect the innocent, hold wrongdoers accountable, and prevent the repetition of injustice.
While forgiveness is personal, justice is communal and, as such, it has meaning because human beings do not live as islands or isolated individuals. We live together—as families, communities, institutions, and nations. What one person does to another can affect an entire community. A crime committed against one human being is a wound caused in the entire social fabric. Justice, therefore, seeks to protect the common good, uphold the dignity and rights of every person, establish equity, repair what has been broken, and ensure accountability.
If a person steals from the public, forgiveness does not eliminate the obligation to restore what can be restored.
If a person abuses public office, repentance does not automatically remove the need for accountability. If a person participates in violence, forgiveness does not require society to abandon the pursuit of truth. If someone has disappeared, forgiveness does not mean that the family should stop asking what happened. A Christian victim, as in the case of the Easter Bombing, may forgive. But mere seeking truth, on behalf of that victim, both individually and communally, is an act of solidarity with the wounded and the suffering.
Speaking on the side of the wrongdoers, if a person sins privately, the Christian faith requires that that person reconcile with God and with his or her own conscience. But if he or she commits a crime against another person, while forgiveness of God and reconciliation with the self is always a personal job, and available upon genuine remorse, request, and change of heart, there is a social dimension that the offender should fulfill, as given in the constitution or the law. Religious language must never become a shield behind which perpetrators escape accountability.
Forgiveness, Justice, and Mercy
The life of Jesus makes the distinction among forgiveness, justice, and mercy quite unmistakable. When Jesus encountered sinners, He repeatedly offered forgiveness. To the woman caught in adultery, He said: “Neither do I condemn you. Go, and from now on do not sin anymore” (Jn 8:11). Notice the two dimensions of this encounter. Jesus forgives, but He does not deny sin. He does it with great mercy and calls for conversion. The past is not rewritten. Instead, the sinner is offered a new future. Mercy does not erase truth; it makes transformation possible.
The same Jesus, who forgave individuals, also confronted social and structural wrongdoing. He overturned the tables of those who had transformed the Temple into a marketplace (Mt 21:12–13). He publicly challenged religious leaders who exercised authority while neglecting the weightier matters of the law: justice, mercy, and faith (Mt 23:23). Jesus did not remain silent simply because He was preaching forgiveness. He confronted hypocrisy. He challenged the abuse of authority. He defended the dignity of the vulnerable. He challenged structures that placed religious burdens upon ordinary people while those in authority protected themselves.
And at the very moment of His own execution, Jesus prayed: “Father, forgive them, for they know not what they do” (Lk 23:34). Yet His forgiveness did not make the crucifixion just. The Cross remains one of history’s most profound revelations of human violence, injustice, and the abuse of power. Jesus forgave His executioners without declaring their actions righteous. That is the foundation and the meaning of the Christian Cross and suffering, and that’s where the Church’s concern for justice becomes particularly important.
A Call
Christian theology cannot simply comfort victims while leaving intact the structures that produce suffering. The Church’s preferential option for the poor requires Catholics to stand with those whose voices are least likely to be heard. While solidarity with them requires us to recognise that the suffering of another is not simply “their problem,” forgiveness demanding victims to remain silent is a distortion of the Gospel. Prayer and worship that do not concern justice could become mere sentimentality. The Eucharist we celebrate at the altar must eventually lead us to the human being who suffers beyond the walls of the church.
Hailing from St. Sebastian’s Parish, Katuwapitiya, Negombo—where alone 117 people were killed in the Easter Sunday bombing in 2019—and as someone who continues to accompany the victimised children and families in their ongoing journey of grief, healing, and the search for truth, ever since that unfortunate day and to this day. I reckon that our greatest danger should not be that justice may fail. Rather, our greater danger should be that, in the pursuit of justice, we may lose our souls. Jesus asked, “What profit would there be for one to gain the whole world and forfeit his life?” (Mk 8:36). When adapted these words to our own context here, one might ask: What does it profit us if we, one day, obtain every political victory, every judicial judgment, and every public apology, but in the process lose our peace, fill our hearts with anger, hatred, and resentment, and surrender our capacity to forgive and to pray for those who persecute us?
The pursuit of justice must never cost us our humanity or our place in heaven. We must seek the truth, demand accountability, and work for justice with courage—but without allowing the wounds inflicted upon us to transform us into what we oppose. We can pursue justice without hatred, demand accountability without vengeance, and seek truth while leaving room for mercy. For the Christian, the ultimate victory is not merely that justice is done, but that, in seeking justice, we do not lose the capacity to love. The Gospel never asks us to choose between faith and justice. Rather, it calls us to practice a faith that does justice—for the greater glory of God and for the greater dignity of every human person. Forgiveness heals the heart. Justice heals the social wound. Mercy makes both possible. The Christian vocation is to pursue a deeper synthesis: truth with mercy, justice with forgiveness, accountability with the possibility of redemption.
Author
Rev. Dr. Rashmi M. Fernando, S.J., is a professor at the College for Business Administration (CBA), Special Assistant to the Provost, and Cabinet Fellow for Global Affairs at Loyola Marymount University (LMU), Los Angeles, California; and Pastoral Coordinator for the Sri Lankan Catholic Community (SLCC) in California, USA.
Features
Accountability must not be limited to bribery and corruption
by Jehan Perera
The arrest of SLPP National Organiser and Member of Parliament Namal Rajapaksa on corruption charges related to the massive Airbus purchase scandal of 2013 has captured the centre stage of public attention. He was arrested by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) on September 4 and remanded until September 18. The allegations concern an alleged payment of US$800,000 connected to the procurement of Airbus aircraft by SriLankan Airlines. Opposition political parties working together with the SLPP have condemned the arrest as being politically motivated. They point to the mass opposition public rally to be organised by the SLPP on September 12 as being the reason for the arrest.
The SLPP together with other opposition political parties have been trying to get back to the public eye as being viable opposition political parties after the drubbing they received at the last presidential and general elections held in 2024. However, they face a daunting task. They face a government with a 2/3 majority in Parliament and a President who currently enjoys a 75 percent approval rating with the people as indicated in the recent CPA survey. The main issue that led to the electoral watershed in 2024 was corruption and abuse of power that was widely believed to have fed into the collapse of the national economy in 2022. The arrest of the SLPP National Organiser and the charges against him bring back the issue of past corruption to the fore.
There is a strong public case for pursuing accountability for corruption, irrespective of the political status of those being investigated. President Anura Kumara Dissanayake has claimed that if all alleged corruption and wrongdoing uncovered by the government were fully investigated, hardly anyone among those responsible would be left untouched. The fact that an alleged wrongdoer in the Airbus scandal is the scion of one of the most formidable political dynasties in the country and is the leader of a major political party is not deterring the government.
Enormous Scale
The present government is demonstrating a greater determination coupled with political will to push the accountability process forward compared to previous governments. This is not the first occasion on which Namal Rajapaksa has been arrested as part of government investigations into corruption. In 2015, the government headed by President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe launched a major investigation into the Airbus deal as the amounts at stake were enormous. In 2013, SriLankan Airlines had contracted for six A330-300s and four A350-900s, with further A350 leases arranged for a fleet renewal programme valued at over US$2.5 billion. That figure is comparable in size to the US$3 billion IMF bailout and shows the scale of exposure the loss-making state-owned carrier was taking on. SriLankan Airlines decided to exit the leases starting in 2015–2016 following the change of government. The penalties paid exceeded US$100 million.
After the catastrophe, the Sirisena-Wickremesinghe government appointed a high powered investigation body. Despite the Board of Inquiry’s recommendation that former executives face criminal prosecution, no one named in the report was ever successfully prosecuted. The Airbus case is particularly important because what is at stake is not simply the size of the alleged bribe. What is more troubling is the deliberate commitment of scarce public resources to a loss-making enterprise, for a personal gain far smaller than the cost imposed on the national budget. Corruption is not only about what an individual allegedly gets as a commission or bribe. It is also about the public resources committed, institutions weakened, and opportunities lost when decisions serve private rather than public benefit.
Having completed two years in power, like past governments, the NPP government is still trying to define who was responsible for the current state of affairs in the country. Instead, they need to shift their thinking on what institutions and systems must be changed so that past problems cannot easily recur. This means moving from anti-corruption politics to systems reform. This distinction is crucial. One can prosecute a set of corrupt individuals and still leave behind a system that produces another set. Conversely, if procurement, appointments, public finance, political financing, policing and judicial processes and reconciliation are redesigned properly, opportunities for corruption and political abuse will be reduced. For the NPP, therefore, the real measure of success should not simply be how many former politicians are investigated or prosecuted. It should be whether, by the end of its term, Sri Lanka has become a country in which it is substantially harder for any future government to abuse public power.
Broader Accountability
This broader understanding of accountability is particularly important because financial crimes and corruption, grievous though they be, are not the only set of gross misdeeds that plunged the country to the bottom rungs of development in the world. There is another issue of accountability that needs to be pursued. This is to find out what happened to the tens of thousands of missing persons due to political violence in the past four to five decades which has put Sri Lanka in the second spot internationally for the number of missing persons. Amnesty International has estimated that at least 60,000 and possibly as many as 100,000 people have been subjected to enforced disappearance in Sri Lanka since the 1980s.The numbers are so large that they should shock the conscience of the country. It is telling that the disappearance of a person does not attract the same public attention as the disappearance of money.
A missing million dollars matters because it belongs to the people. A missing person matters because that person belongs to a family, a community, a country. Both are failures of the same underlying obligation that the state apply accountability equally, to money and to people, regardless of who is harmed or who is implicated. While lost public money weakens the economy, disappeared people weaken the body politic itself. In the case of Sri Lanka, the disappeared are disproportionately Tamil, though people of all communities have vanished during the country’s cycles of violence. The question this raises is whether ethnic minority citizens believe the state cares for them as it does the ethnic majority. A citizen should not have to ask whether the state cares about the disappearance of a person because that person was Tamil, Muslim or Sinhalese. Nor should a family have to wait for decades for an answer simply because the disappearance occurred during a period of political violence. This needs to be pursued with the same political will that is now being demonstrated in relation to corruption. The pursuit of accountability for corruption can therefore become an opportunity to demonstrate that accountability is not selective. It needs to apply to financial wrongdoing, abuse of power, violations of rights and the failure of institutions to protect citizens.
The government has an opportunity to show that accountability is not about settling political scores with the previous rulers. It is about establishing a standard of public responsibility that applies to everyone and every institution.This is also important for national unity, both in name and in spirit. If ethnic minority citizens are to feel a sense of belonging to the Sri Lankan state, they need to know that their suffering matters as much as the loss of public money. Otherwise, unresolved grievances will remain a wound in the body politic and continue to weaken it. The missing people matter as much as the missing millions. In fact, people matter more than money in our society. The real test of accountability is whether Sri Lanka can build institutions and systems in which neither public money nor people can disappear without consequence.
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